Description
Keywords: Importance of rural marketing, The rural market size, Factors driving the growth, Hurdles in rural marketing, Major challenges for an Indian MBA, Strategies for rural marketing, Examples from the Indian corporate
Abhishek Sriram – 2008A02 Amit Ahuja – 2008A14 Roshan Rebello – 2008A31 Gautam Hazarika – 2008A35 Vishal Bhatia – 2008A44 Abhishek Kamle – 2008A45 Harsh Chopra – 2008A49 Vikas D Nahar – 2008C68
Agenda
Town Demographics Developmental Statistics Role as a feeder town Market Structure – Food grains Market Structure – Consumer Durables Market Structure – Edible Oils Market Structure – Chocolates and Confectioneries Market Structure – Beverages Market Structure – FMCG Products
Brands Studied
Demographics
Population:
•31,110
Literacy rate: 70%
Income resources
•Primary Sources: Farming and Horticulture/Floriculture (60%) •Secondary Sources: Other Jobs & Services (40%) •Per Capita Income – Rs 1761
Development Projects
• Tourism Development (Marathi Vishvakosh, Historical Temples and spots, Beautiful locales) • Integrated Housing Slum Development (IHSD) scheme.
Occupation
• Farming, Shops, MIDC Employees, Tourism
Schools & Colleges
•9 High schools & 1 college. •MIDC Area
Industries
•Garware wall ropes, Bharat Gas, SSI (Processed Foods)
Agricultural Outputs
•Sugarcane, Turmeric, Bajra, Jowar, Wheat, Ginger, Garlic etc.
Irrigation by the Dhom dam built across the Krishna river.
7
Lifestyle
Household with TV
• 90% of households
Household with land line, mobile phones
• 90% people have mobiles. • 30% have land line.
Household with 2 wheelers, 4 wheelers:
• Multiple 50% 2 wheelers • 5 % 4 wheelers.
Lifestyle
• Tractors 4%
8
Household with tractors, bullock carts:
Household with livestock
• 20% farmers
Banking Facilities
• 11 banks offering Personal loans, housing loan, automobile loan, agricultural loan etc. • Banks like ICICI, Bank Of India, IDBI,SBI, Bank Of Maharashtra
The Movie Theatre
Edible Oil Brands
Distributor for paints and adhesives
Bulk Breaking at distributor premises
Spices Wholesaler
Wai Mandi
Grain Wholesaler
Grain Wholesaler
State bank of India
Nagar Parishad
Food Grains, Pulses and Condiments
Satara
Wai
Feeding Villages
•120 Villages •Average population 2000 •Bhuing, Velang, Asare, Jamb kakali
Distributors
Wholesalers
Consumer Durables
Television
Television Distribution in Wai
Manufacturer Distributer in Satara District Dealers & Retailers in Wai
Feed to Customers in Wai & 150 Villages around Wai
Distribution Channel for Wai Brands Available in Wai
Almost 90% of the Household have a TV. Brand of Refrigerators sold are Whirlpool , LG , Samsung , Godrej Villagers usually buy a DTH connection when they buy a new Television Dish TV Tata Sky Big TV Videocon DTH
LG
TV Market Facts
TV Retailers also sell Refrigerators
Samsung
Onida
Sansui
Bank provides support to Retailers for working capital i.e. Hypothecation of the goods in the shop is in the name of local banks. Villagers buy in cash n, no credit.
BTL promotions also done at dealers through posters & giving the cash discounts.
Sharp
DTH service providers in & around WAI
No Village has a TV retailer.
Promotions usually done by TV
Interaction with TV dealer
Shree Enterprises , Owner : Mr. Atul Waiker , All Goods in the shop are Hypothecated to Wai Urban Bank
Fertilizer Distribution in Wai
Manufacturer Dealers in Wai Farmers from 150 Villages around Wai procure it from dealers in Wai
Brands Available in Wai
Zuari
Distribution Channel for Wai
Deepak Fertilizers
MIDC Fertilizers
Koromandal am Fertilizers
Jai Kisan
Interaction with Fertilizer Dealer cum Retailer
Edible Oils
Edible Oils
Mr. G.D Gandhi, Wholesaler
Brands •Gemini(Soyabean ,Sunflower, Palmolein, Vanaspati) •Kirti Gold •Tezas SKU – 15 L Supplies to 30-35 villages Gets his supplies from Wholesaler at Satara •250 tins in 3 days and replenishes his stock every 3 days •Delivery by the Satara W/D or on his own in case of urgency. Promotional offer – cash discount to WS Insights:
• Tezas is a local brand from Tina Oil Mills and has good penetration into the commercial market due to lower in price. • Soyabean oil sells the most and then Sun Flower. • Brands with small SKUs of 1L present in the market are: Gemini, Mayur, Surya, Ratham, Satguru. • Except Gemini of Cargill rest are local products • Nearly 80% of population use Soyabean oil. • There are around 140 villages which get their supplies from Wai - villages like Doha, Velang, Ashrai, Jhambri etc.
Chocolates and Confectioneries
Distribution
Manufacturer CFA (Kolhapur)
RDS – Non Rural (Satara)
RDS – Rural(Karad)
RDS – Rural(Phaltan)
RDS – Rural(Wai)
Wholesaler (Feeder Towns)
Kirana Stores (Feeder Towns)
Village Stores
Village Stores
Popular SKUs •Eclairs (Rs.1) •Gems (Rs.5 and Rs.2) •Dairy Milk (Rs.5) •Halls (Rs.0.50) •Bournvita (Rs.20)
Coverage Frequency • Class A – Weekly • Class B - Fortnightly • Class C – Monthly
Cadbury’s
Average Monthly Turnover – Rs. 11 lakhs (40% non feeder town) Bulk Breaking of 100X packs to 20X and 30X packs of assorted SKUs
Wholesalers account for around 10% of total sales
Direct Replenishment at selected village outlets (DRO)
These DROs act as mini stockists for villages which RDS cannot access profitably
Promotion include merchandising of popular sweet stores in the area during festivals
2 Wheelers in Wai Taluka Company – Bajaj Auto
Distribution
Plant (Waluj) Dealer (Digvijay – Satara)
Authorized Service Centre (Wai) Certified Service Point (Panchgani) Authorized Mechanics (2000+ pop’n villages)
Authorized Service Centers retail vehicles and service vehicles
Certified Service Points service vehicles only
Separate Sales Team for rural distribution
Promotion through hoardings in strategic locations
Monthly Average Sales of around 30 vehicles (Industry – 100)
Mileage Conscious Populace
Promotion done through auto rickshaws with loud speakers, leaflets and road shows
Peak demand during Diwali
Popular SKUs include the Platina and the Discover 125
Strong Word Of Mouth and local mechanic recommendation
WOM built through training of local mechanics on best practices, providing training certificates, organizing plant visits etc.
FMCG - Beverages
Coca Cola
Distributor- Jayant Distributor
General Information:
Number of Villages Covered: 50 Salesman employed: 2 Annual Turnover: 2.5 crores
Owner: Milind Khamkar, Address: 1013, Brahmanshahi, Wai, Ph: 02167-222603
Total Warehouse space: 1200 + 3000 sq feet
Replenishment: Once a week
• Single van carries all merchandize of all the brands • Credit facilities is offered to bigger retailers whereas smaller retailers operate on cash basis.
Mr. Gajanan Borkar – ASM Distribution Planning: PJP ( Permanent Journey Plan) EDS: Every Dealer Survey Horizontal expansion through benchmarking In order to penetrate rural market, Coca-cola employed:
• Distribution of ice-boxes • Tie-up with Haier for cold storages • Distribution through RGB’s ( Returnable Glass Bottle and not Cans)
On an average, each outlet sells 70-80 cases/ year Promotion Schemes:
• Gammat Gadi • Chowfula
Thums Up – The most popular category Key Insight: People in the district are more inclined toward drinks with higher fizz. Brand Awareness: Not a problem because of penetration of television
Coca Cola and Jayant Distributor
?
Previously Jayant Distributor was sole distributor of Pepsi. However, Pepsi did not give the promised margins to the distributor. Coca had problems with distribution evident from the fact that is shifted 11 distributor in 3 years before switching to Jayant distributor.
Business in rural market is based on relationship
In beverage category, inclination of the rural consumer has been more towards fruit juices and energy drinks in spite of the price points. (Minute maid, Real Juices, Red Bull, Cloud 9)
In biscuits category, Parle is the most purchased brand in Wai.
In chocolates, Cadbury lower priced SKU’s is the most selling brand
Coca is more aggressive than Pepsi evident from the hoardings on the highways and in and around Wai In confectionaries, Chlormint is popular at Pan-Shops and brands like Centre fresh, Happy Dent, Alpenliebe are popular in Panchgani, Mahabaleshwar.
FMCG & Telecom
HUL & Airtel
M/s. Rajendra. P. Gade
Mr. Rajendra. P. Gade has been associated with HUL for the last 40 years and with Airtel from the last 7 years as distributor
M/s. Rajendra. P. Gade currently caters to 47 markets to name a few
Jamb Udtare Meda Bilar (lowest population of just 1000)
HUL Products Sold
Detergents
•Wheel, Surf Excel
Toothpaste
•Close up & Pepsodent
Soaps
•Lux, Lifebuoy, Hamam
Cream
•Fair & Lovely, Vaseline
Powder
•Ponds,
Shampoos
•Clinic Plus, Sunsilk
Water Filter
•PureIT
Mobile market report
Idea is the market leader with 50% market share and has the best network coverage Airtel has 30% market share Airtel carries out promotion through mobile vans Whereas new entrant DoCoMo has done well recently Mostly Prepaids are sold, post paid are only 5% of the total sales Prepaid preferred due to low paper work, less defaulters for company DoCoMo successful only with agriculture workers and students (2 Sims)
Mr. Gade speaks
Total T/O 25,00,000 per month Weekly replenishment to all the 47 markets Sachets contribute to 95% of the sales volume for all products. 50% of the sales are on credit basis Credit period – 7, 14, 30 days. Next delivery only on clearing previous dues.
30 % of the HUL Distributors turnover of 25 lakhs per month comes via Wheel
Lux is the best Seller in the market better than lifebuoy
Pears sales are substantial only in the winter periods
40 permanent staffs employeed
7 personnel for Sales beat – HUL , 2 for Airtel
10 tonnes or more delivery directly thru company depot- Kolhapur.
Margins:
•2% wholesaler •4.76% distributor •8 – 10% Retailer
Vaseline only 6 Rs pack of 20ml sells
1% cash discount on purchase of 50,000 and above is given to retailer
Total population served 1,50,000
Weekly 1-2 visits from the company
Market with
Keywords: Importance of rural marketing, The rural market size, Factors driving the growth, Hurdles in rural marketing, Major challenges for an Indian MBA, Strategies for rural marketing, Examples from the Indian corporate
Abhishek Sriram – 2008A02 Amit Ahuja – 2008A14 Roshan Rebello – 2008A31 Gautam Hazarika – 2008A35 Vishal Bhatia – 2008A44 Abhishek Kamle – 2008A45 Harsh Chopra – 2008A49 Vikas D Nahar – 2008C68
Agenda
Town Demographics Developmental Statistics Role as a feeder town Market Structure – Food grains Market Structure – Consumer Durables Market Structure – Edible Oils Market Structure – Chocolates and Confectioneries Market Structure – Beverages Market Structure – FMCG Products
Brands Studied
Demographics
Population:
•31,110
Literacy rate: 70%
Income resources
•Primary Sources: Farming and Horticulture/Floriculture (60%) •Secondary Sources: Other Jobs & Services (40%) •Per Capita Income – Rs 1761
Development Projects
• Tourism Development (Marathi Vishvakosh, Historical Temples and spots, Beautiful locales) • Integrated Housing Slum Development (IHSD) scheme.
Occupation
• Farming, Shops, MIDC Employees, Tourism
Schools & Colleges
•9 High schools & 1 college. •MIDC Area
Industries
•Garware wall ropes, Bharat Gas, SSI (Processed Foods)
Agricultural Outputs
•Sugarcane, Turmeric, Bajra, Jowar, Wheat, Ginger, Garlic etc.
Irrigation by the Dhom dam built across the Krishna river.
7
Lifestyle
Household with TV
• 90% of households
Household with land line, mobile phones
• 90% people have mobiles. • 30% have land line.
Household with 2 wheelers, 4 wheelers:
• Multiple 50% 2 wheelers • 5 % 4 wheelers.
Lifestyle
• Tractors 4%
8
Household with tractors, bullock carts:
Household with livestock
• 20% farmers
Banking Facilities
• 11 banks offering Personal loans, housing loan, automobile loan, agricultural loan etc. • Banks like ICICI, Bank Of India, IDBI,SBI, Bank Of Maharashtra
The Movie Theatre
Edible Oil Brands
Distributor for paints and adhesives
Bulk Breaking at distributor premises
Spices Wholesaler
Wai Mandi
Grain Wholesaler
Grain Wholesaler
State bank of India
Nagar Parishad
Food Grains, Pulses and Condiments
Satara
Wai
Feeding Villages
•120 Villages •Average population 2000 •Bhuing, Velang, Asare, Jamb kakali
Distributors
Wholesalers
Consumer Durables
Television
Television Distribution in Wai
Manufacturer Distributer in Satara District Dealers & Retailers in Wai
Feed to Customers in Wai & 150 Villages around Wai
Distribution Channel for Wai Brands Available in Wai
Almost 90% of the Household have a TV. Brand of Refrigerators sold are Whirlpool , LG , Samsung , Godrej Villagers usually buy a DTH connection when they buy a new Television Dish TV Tata Sky Big TV Videocon DTH
LG
TV Market Facts
TV Retailers also sell Refrigerators
Samsung
Onida
Sansui
Bank provides support to Retailers for working capital i.e. Hypothecation of the goods in the shop is in the name of local banks. Villagers buy in cash n, no credit.
BTL promotions also done at dealers through posters & giving the cash discounts.
Sharp
DTH service providers in & around WAI
No Village has a TV retailer.
Promotions usually done by TV
Interaction with TV dealer
Shree Enterprises , Owner : Mr. Atul Waiker , All Goods in the shop are Hypothecated to Wai Urban Bank
Fertilizer Distribution in Wai
Manufacturer Dealers in Wai Farmers from 150 Villages around Wai procure it from dealers in Wai
Brands Available in Wai
Zuari
Distribution Channel for Wai
Deepak Fertilizers
MIDC Fertilizers
Koromandal am Fertilizers
Jai Kisan
Interaction with Fertilizer Dealer cum Retailer
Edible Oils
Edible Oils
Mr. G.D Gandhi, Wholesaler
Brands •Gemini(Soyabean ,Sunflower, Palmolein, Vanaspati) •Kirti Gold •Tezas SKU – 15 L Supplies to 30-35 villages Gets his supplies from Wholesaler at Satara •250 tins in 3 days and replenishes his stock every 3 days •Delivery by the Satara W/D or on his own in case of urgency. Promotional offer – cash discount to WS Insights:
• Tezas is a local brand from Tina Oil Mills and has good penetration into the commercial market due to lower in price. • Soyabean oil sells the most and then Sun Flower. • Brands with small SKUs of 1L present in the market are: Gemini, Mayur, Surya, Ratham, Satguru. • Except Gemini of Cargill rest are local products • Nearly 80% of population use Soyabean oil. • There are around 140 villages which get their supplies from Wai - villages like Doha, Velang, Ashrai, Jhambri etc.
Chocolates and Confectioneries
Distribution
Manufacturer CFA (Kolhapur)
RDS – Non Rural (Satara)
RDS – Rural(Karad)
RDS – Rural(Phaltan)
RDS – Rural(Wai)
Wholesaler (Feeder Towns)
Kirana Stores (Feeder Towns)
Village Stores
Village Stores
Popular SKUs •Eclairs (Rs.1) •Gems (Rs.5 and Rs.2) •Dairy Milk (Rs.5) •Halls (Rs.0.50) •Bournvita (Rs.20)
Coverage Frequency • Class A – Weekly • Class B - Fortnightly • Class C – Monthly
Cadbury’s
Average Monthly Turnover – Rs. 11 lakhs (40% non feeder town) Bulk Breaking of 100X packs to 20X and 30X packs of assorted SKUs
Wholesalers account for around 10% of total sales
Direct Replenishment at selected village outlets (DRO)
These DROs act as mini stockists for villages which RDS cannot access profitably
Promotion include merchandising of popular sweet stores in the area during festivals
2 Wheelers in Wai Taluka Company – Bajaj Auto
Distribution
Plant (Waluj) Dealer (Digvijay – Satara)
Authorized Service Centre (Wai) Certified Service Point (Panchgani) Authorized Mechanics (2000+ pop’n villages)
Authorized Service Centers retail vehicles and service vehicles
Certified Service Points service vehicles only
Separate Sales Team for rural distribution
Promotion through hoardings in strategic locations
Monthly Average Sales of around 30 vehicles (Industry – 100)
Mileage Conscious Populace
Promotion done through auto rickshaws with loud speakers, leaflets and road shows
Peak demand during Diwali
Popular SKUs include the Platina and the Discover 125
Strong Word Of Mouth and local mechanic recommendation
WOM built through training of local mechanics on best practices, providing training certificates, organizing plant visits etc.
FMCG - Beverages
Coca Cola
Distributor- Jayant Distributor
General Information:
Number of Villages Covered: 50 Salesman employed: 2 Annual Turnover: 2.5 crores
Owner: Milind Khamkar, Address: 1013, Brahmanshahi, Wai, Ph: 02167-222603
Total Warehouse space: 1200 + 3000 sq feet
Replenishment: Once a week
• Single van carries all merchandize of all the brands • Credit facilities is offered to bigger retailers whereas smaller retailers operate on cash basis.
Mr. Gajanan Borkar – ASM Distribution Planning: PJP ( Permanent Journey Plan) EDS: Every Dealer Survey Horizontal expansion through benchmarking In order to penetrate rural market, Coca-cola employed:
• Distribution of ice-boxes • Tie-up with Haier for cold storages • Distribution through RGB’s ( Returnable Glass Bottle and not Cans)
On an average, each outlet sells 70-80 cases/ year Promotion Schemes:
• Gammat Gadi • Chowfula
Thums Up – The most popular category Key Insight: People in the district are more inclined toward drinks with higher fizz. Brand Awareness: Not a problem because of penetration of television
Coca Cola and Jayant Distributor
?
Previously Jayant Distributor was sole distributor of Pepsi. However, Pepsi did not give the promised margins to the distributor. Coca had problems with distribution evident from the fact that is shifted 11 distributor in 3 years before switching to Jayant distributor.
Business in rural market is based on relationship
In beverage category, inclination of the rural consumer has been more towards fruit juices and energy drinks in spite of the price points. (Minute maid, Real Juices, Red Bull, Cloud 9)
In biscuits category, Parle is the most purchased brand in Wai.
In chocolates, Cadbury lower priced SKU’s is the most selling brand
Coca is more aggressive than Pepsi evident from the hoardings on the highways and in and around Wai In confectionaries, Chlormint is popular at Pan-Shops and brands like Centre fresh, Happy Dent, Alpenliebe are popular in Panchgani, Mahabaleshwar.
FMCG & Telecom
HUL & Airtel
M/s. Rajendra. P. Gade
Mr. Rajendra. P. Gade has been associated with HUL for the last 40 years and with Airtel from the last 7 years as distributor
M/s. Rajendra. P. Gade currently caters to 47 markets to name a few
Jamb Udtare Meda Bilar (lowest population of just 1000)
HUL Products Sold
Detergents
•Wheel, Surf Excel
Toothpaste
•Close up & Pepsodent
Soaps
•Lux, Lifebuoy, Hamam
Cream
•Fair & Lovely, Vaseline
Powder
•Ponds,
Shampoos
•Clinic Plus, Sunsilk
Water Filter
•PureIT
Mobile market report
Idea is the market leader with 50% market share and has the best network coverage Airtel has 30% market share Airtel carries out promotion through mobile vans Whereas new entrant DoCoMo has done well recently Mostly Prepaids are sold, post paid are only 5% of the total sales Prepaid preferred due to low paper work, less defaulters for company DoCoMo successful only with agriculture workers and students (2 Sims)
Mr. Gade speaks
Total T/O 25,00,000 per month Weekly replenishment to all the 47 markets Sachets contribute to 95% of the sales volume for all products. 50% of the sales are on credit basis Credit period – 7, 14, 30 days. Next delivery only on clearing previous dues.
30 % of the HUL Distributors turnover of 25 lakhs per month comes via Wheel
Lux is the best Seller in the market better than lifebuoy
Pears sales are substantial only in the winter periods
40 permanent staffs employeed
7 personnel for Sales beat – HUL , 2 for Airtel
10 tonnes or more delivery directly thru company depot- Kolhapur.
Margins:
•2% wholesaler •4.76% distributor •8 – 10% Retailer
Vaseline only 6 Rs pack of 20ml sells
1% cash discount on purchase of 50,000 and above is given to retailer
Total population served 1,50,000
Weekly 1-2 visits from the company
Market with